New Zealand Professional Investment Services Firm, Forsyth Barr

Forsyth Barr

New Zealand Professional Investment Services Firm

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

Equity Bottom-Up

<ul><li>As expected, Vulcan Steel (VSL) reported a weak 1H25. The Steel division remains under cyclical and competitive pressure.</li><li>Metals outperformed expectations, driven by stronger margins from higher aluminium prices and operational improvements in Ullrich.</li><li>Management provided a mixed but cautiously optimistic demand outlook, expecting volumes and pricing to firm gradually over the next 12 months. </li></ul>

As expected, Vulcan Steel (VSL) reported a weak 1H25. The Steel division remains under cyclical and competitive pressure.Metals outperformed expectations, driven by stronger margins from higher aluminium prices and operational improvements in Ullrich.Management provided a mixed but cautiously optimistic demand outlook, expecting volumes and pricing to firm gradually over the next 12 months. 

Vulcan Steel - 1H25 Result—Forging Ahead

<ul><li>Vulcan Steel (VSL) will report its 1H25 result on Tuesday, 11 February.</li><li>We expect 1H25 EBITDA down c.-30% on the prior year, with operating deleverage from volume declines in both its Steel and Metals divisions and competitive pressure reducing gross dollar margin per tonne.</li><li>Operating conditions remain challenging, but we expect volumes to remain stable in 2H25, before picking up in 1H26, supported by improving business confidence on both sides of the Tasman and lower interest rates. </li></ul>

Vulcan Steel (VSL) will report its 1H25 result on Tuesday, 11 February.We expect 1H25 EBITDA down c.-30% on the prior year, with operating deleverage from volume declines in both its Steel and Metals divisions and competitive pressure reducing gross dollar margin per tonne.Operating conditions remain challenging, but we expect volumes to remain stable in 2H25, before picking up in 1H26, supported by improving business confidence on both sides of the Tasman and lower interest rates. 

Vulcan Steel - 1H25 Preview: Cycling Through the Trough

<ul><li>Vulcan Steel's (VSL) trading update highlighted near-term volume and margin pressure has continued to a greater degree than we had forecast.</li><li>The Steel division has seen the largest impacts, with activity declines and competitive pressures the most acute.</li><li>Whilst near-term risks remain, there are signs VSL is nearing the end of the downgrade cycle, with lower interest rates and improved business confidence. </li></ul>

Vulcan Steel's (VSL) trading update highlighted near-term volume and margin pressure has continued to a greater degree than we had forecast.The Steel division has seen the largest impacts, with activity declines and competitive pressures the most acute.Whilst near-term risks remain, there are signs VSL is nearing the end of the downgrade cycle, with lower interest rates and improved business confidence. 

Vulcan Steel - A Long Trek Through the Trough

<ul><li>Vulcan Steel (VSL) reported an unsurprisingly soft FY24 result. 2H24 volumes were broadly in line with expectations, but margins were weaker.</li><li>Higher depreciation and tax saw NPAT miss our expectation. We have adjusted our estimates accordingly.</li><li>Outlook comments were in line with expectations, with a modest pick up in NZ demand expected in 2H25 but a more cautious tone on Australia. </li></ul>

Vulcan Steel (VSL) reported an unsurprisingly soft FY24 result. 2H24 volumes were broadly in line with expectations, but margins were weaker.Higher depreciation and tax saw NPAT miss our expectation. We have adjusted our estimates accordingly.Outlook comments were in line with expectations, with a modest pick up in NZ demand expected in 2H25 but a more cautious tone on Australia. 

Vulcan Steel - FY24 Result — Steely Resolve

<ul><li>We downgrade Vulcan Steel (VSL) to NEUTRAL from OUTPERFORM.</li><li>This reflects: (1) VSL now trading in-line with our view of fair value and peer multiples, FY25 PE of 15x, after a recent lift in the share price; and (2) recent business survey data and our channel checks that have highlighted subdued NZ activity after some green shoots over the first few months of the year.</li><li>As a result we have tempered our 2H24 volume assumptions and are now more in-line with consensus. </li></ul>

We downgrade Vulcan Steel (VSL) to NEUTRAL from OUTPERFORM.This reflects: (1) VSL now trading in-line with our view of fair value and peer multiples, FY25 PE of 15x, after a recent lift in the share price; and (2) recent business survey data and our channel checks that have highlighted subdued NZ activity after some green shoots over the first few months of the year.As a result we have tempered our 2H24 volume assumptions and are now more in-line with consensus. 

Vulcan Steel - Solid Steel Price, Down to Neutral

New Zealand

Vulcan Steel Ltd operates as a metals distributing and processing company. The Company offers stainless and engineering steel products. Vulcan Steel serves customers in Australia and New Zealand.

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Vulcan Steel Limited (VSL NZ)

Vulcan Steel - 1H25 Result—Forging Ahead

Management provided a mixed but cautiously optimistic demand outlook, expecting volumes and pricing to firm gradually over the next 12 months.

Forsyth Barr

Vulcan Steel - 1H25 Preview: Cycling Through the Trough

Vulcan Steel (VSL) will report its 1H25 result on Tuesday, 11 February. We expect 1H25 EBITDA down c.-30% on the prior year

Forsyth Barr

Vulcan Steel - A Long Trek Through the Trough

Vulcan Steel's (VSL) trading update highlighted near-term volume and margin pressure has continued to a greater degree than we had forecast.

Forsyth Barr

Vulcan Steel - FY24 Result — Steely Resolve

Vulcan Steel (VSL) reported an unsurprisingly soft FY24 result. 2H24 volumes were broadly in line with expectations, but margins were weaker.

Forsyth Barr

Vulcan Steel - Solid Steel Price, Down to Neutral

We downgrade Vulcan Steel (VSL) to NEUTRAL from OUTPERFORM. This reflects: (1) VSL now trading in-line with our view of fair value and peer multiples

Forsyth Barr

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